Som Distilleries Faces Backlash Over Child Labor Scandal

Shares of Som Distilleries and Breweries dropped significantly after authorities announced plans to impound one of its distilleries where 59 children were found working illegally. The National Commission for Protection of Child Rights discovered the children in Madhya Pradesh. Weekly losses for the company reached 15%.

Shares of Indian liquor firm Som Distilleries and Breweries fell as much as 9% on Thursday after authorities said they would impound one of the group's distilleries, where officials said 59 children had been working illegally.

Police launched an investigation into Som after the National Commission for Protection of Child Rights (NCPCR) last week found 39 boys and 20 girls working at a distillery in Madhya Pradesh state. The agency also released photos of children's hands with chemical burns. Som shares fell nearly 9% on Thursday, taking weekly losses to 15%, before recovering. The company is valued at $271 million, according to LSEG data.

Som said in an exchange filing this week the issue was related to a plant run by its "associate private limited company", which used labour supplied by contractors, who may not have carried out proper age checks. Some of the children found working at the distillery were taken to the factory in school buses, NCPCR has said.

"On the basis of the interaction with the children, there is an apprehension that the minors found working in the said distilleries may have been brought to the premises in the guise of taking children to school or to play," NCPCR said in a June 19 letter to state officials, seen by Reuters. The state government has temporarily suspended the plant's manufacturing licences.

The company in its 2022 annual report stated its policy and practices relating to protection of human rights, including not using child labour, applies to the company and its units, "as well as to the contractors engaged by the company". In its latest 2023 annual report, Som also flagged zero cases of child labour complaints filed by employees and workers.

Som sells beer and whisky in India's thriving alcohol industry, where both foreign and domestic players operate. Its website describes it as an "internationally acclaimed brand" available in over 20 markets including the United States, New Zealand and the United Kingdom. (Editing by Aditya Kalra)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)